Speech by the Australian Deputy Prime Minister and Minister for Trade, The Hon Tim Fischer to the 39th Annual Convention of the Federation of Automotive Products Manufacturers

Marriot Resort

Surfers Paradise, 23 July 1998

Introduction - Manufacturing for Australia and the World

Thank you, John MacKenzie, President of the FAPM; ladies and gentlemen.

Its a pleasure for me to address this 39th Annual Convention of the Federation of Automotive Products Manufacturers. The automotive industry is a vitally important one for our nation, and the Government is committed to its future.

I also like the theme of your Convention: "Globalisation and Management Best Practice". Both issues are close to my heart and in both, may I say, your industry is increasingly showing the way to the future for the rest of Australia.

Globalisation - Australia's future

Globalisation - a challenging concept for many Australian businesses who have been comfortable in a market of 18 million. But in today's ever-shrinking world, there can be no doubt that we have to come to grips with globalisation if we are to succeed.

And the benefits that flow from success are considerable. Not only can our companies hold their own in domestic markets that have to deal with increasingly sophisticated competition from imports, but we can take the competition to foreign companies on their own turf. Australian manufacturers are doing just that - and they are winning.

Our winning exporters

The automotive industry is showing just what we can do when we take on the global challenge. In 1997, you earned around $2.65 billion in exports for Australia. That's an increase of around $500 million on the previous year. I'm aware the industry has set a target of achieving export revenues of $6 billion by the year 2005, and if recent growth in foreign sales is any indication, you are right on target.

Many of the companies taking part in this year's convention have had remarkable successes on the export front over the past year, but I hope you'll forgive me if a refer to some examples that are fresh in my memory. First were the successes in sales of Camrys to the Middle East, and GMH's announcement that they would be shipping Commodores there soon - the idea of Aussie sedans finding a home in the region from which most of the world's oil comes is great. And then there was Bishop Steering's news earlier this month that its technology would be used in all European-manufactured Mercedes-Benz passenger and light commercial vehicles - their car, but our steering!

What the Government is doing to help

As I said in my introductory remarks, the Government is committed to the future of the automotive industry. Since 1996 we have been working with industry to develop policies that will place automotive manufacturing on a secure, long-term footing.

We've paused tariffs on automotive products at 15% from 2000 until the end of 2004, after which they will be reduced to 10%. That decision was not an easy one, and generated a large amount of debate in the community. But it demonstrated the Government's recognition that trade liberalisation could, and should, be tempered by a common-sense approach that gave Australian industry more certainty and time to adjust to global competition, while allowing us to meet our international trading obligations.

We've put in place the Automotive Competitiveness and Investment Scheme (ACIS), an integrated package that will support jobs and investment in the car industry. And we're encouraging technical innovation in industry through the Research and Development Tax Concession Scheme. These measures, combined with our tariff decision, gives the Australian automotive industry the certainty it needs for long-term decision making, and will allow the development of an industry that is much better equipped to compete globally.

The Government is also developing the Automotive Trade Strategy to will help you win markets for your products overseas, with $20 million of funding over four years. We've provided increased resources to Austrade and DIST for market development activities, including the placement in key overseas auto markets of dedicated automotive trade commissioners. Automotive trade access has been made a priority of the Department of Foreign Affairs and Trade, and we have appointed a special trade facilitator to push ahead on automotive issues.

Our Strategy is being guided by the Automotive Trade Council, which is chaired by Minister John Moore and myself, and which consists of senior representatives of the industry - including your own John MacKenzie. The Council, aided by Ian Grigg as the Prime Minister's special automotive envoy, has a four year charter to deliver the markets which will secure the industry's future. It held its first meeting on 1 July, and agreed on a broad-based trade strategy concentrating on market access issues and the development of collaborative links with industry in key markets.

We have begun our push for greater market access already. My Department's Market Development Task Force is currently working bilaterally on automotive access issues in a wide range of countries, including Korea, Thailand and Germany. Regionally, we have through APEC made significant progress on important issues such as automotive standards, and the automotive sector has been identified for early liberalisation.

Multilaterally, we have also seen some wins at the WTO - for example, in Taiwan we obtained an important new market opening for Australian motor vehicles in the WTO context which has seen Australian-made cars exported to that market for the first time.

Conclusion - global future, global opportunity

The automotive industry, like many others in Australia, has come a long way in the past few decades. But as your Convention shows, you are getting on with the job.

Your program over the next two days is a comprehensive and interesting one - I hope we can all learn a little more about how the industry can compete successfully on a regional and global scale. Automotive manufacturers in Australia have proven their potential in international markets. Now is the time for you to realise that potential.

For its part, the Government will stick by the industry. We've developed policies that are like a Falcon, a Commodore, a Camry or a Magna - suited for Australian conditions, and which are capable of taking on the world! I look forward to working closely with the industry as you continue to build on the excellent export progress of recent years.